Wednesday, February 17, 2021
Institute for Policy Studies, Wealth Concentration: The Unique and Dominant Role of Tax Policy (Jan. 2021):
[H]ow does the influence of tax policy on wealth concentration interact with the influence of other factors? Has tax policy, over the last century, been the dominant factor in the country’s move from an extremely unequal society to a more egalitarian one and back again? Or are other factors equally or more important?
There are no clear answers, at least from our analysis. But we believe our analysis of the relationship between tax payments of the top .01 percent as a percentage of wealth, and the share of American household wealth held by the top .01 percent, indicates that tax policy plays a unique and dominant role in the concentration of wealth. No other factor is as visibly and as directly connected to the concentration of wealth as tax policy. ...
Using the methodology we developed in The Case for a U.S. Wealth Tax, which we’ve included
here as Appendix I, we estimated the change in tax payments as a percentage of wealth for the
top .01 percent throughout the period 1929 to 2018.
Conclusion: The Taxation of America’s Wealthy Has Fallen Far Too Low to Prevent the Concentration of Wealth